"Indian members are even more upbeat about their local market. Six in ten (61 percent) respondents here expect the Indian economy to expand in 2014. (Agencies)
"However, concerns about political instability may affect the outlook. An overwhelming eight in ten (78 percent) cite this as the biggest risk to the local economy – the highest among the major markets surveyed," as per CFA Institute's annual Global Market Sentiment Survey (GMSS) released on Monday.
When it comes to global economic recovery, majority of members from India (56 percent) are optimistic.
Globally, 63 percent of those surveyed said they expect the global economy to expand.
Most optimistic are members in the UK (78 percent) and Brazil (74 percent) while the least are Hong Kong (54 percent) and China (48 percent).
The findings are based on a survey of 6,500 CFA Institute -- a grouping of investment professionals -- members spread across 110 countries. About 162 people were surveyed from India.
"Indian members are also significantly concerned about the lack of ethical culture within financial firms, with 62 percent identifying that as the main factor causing the current lack of trust in the finance industry.
"Only Switzerland (71 percent) and Singapore (63 percent) are more critical," the report noted.
As many as 96 percent of respondents from India felt that effects on energy prices caused by unrest in the Middle East would have a negative impact.
"More Indian respondents also believe that progress of recovery in Europe would have a positive impact (85 percent), to a much greater degree than they believe progress of recovery in China (56 percent) or even domestic political stability (58 percent) would," the report said.
Navneet Munot, a director of the advocacy committee and board member of the Indian Association of Investment Professionals (IAIP), said that India heads into a general election next year and that is likely why concerns over domestic political instability feature so prominently.
IAIP is a member society of CFA Institute. CFA Institute's President and CEO John Rogers said that the number of members who expect the global economy to expand has nearly doubled in the last two years.
"The survey reflects that investor trust has been eroded and in order for the financial industry to be an extraordinary force for good, we must embrace ethical behavior at all levels," Rogers noted.
"Indian members are even more upbeat about their local market. Six in ten (61 percent) respondents here expect the Indian economy to expand in 2014.